The Philippine Competition Commission said Tuesday it approved the acquisition by Japan Tobacco (Philippines) Inc. of Mighty Corp., and the joint venture of Rockwell Land Corp. and Mitsui Fudosan (Asia) Pte. Ltd.
The commission said both transactions were not likely to result in anti-competitive effects in the market.
“There appears to be no ability nor incentive for the parties to engage in anti-competitive coordinated behavior. Sufficient competitive constraints remain from other market participants after the sale,” it said in a statement.
The PCC is an independent, quasi-judicial body formed to implement the Philippine Competition Act. It reviews mergers and acquisitions worth at least P1 billion.
Under the deal, Japan Tobacco will own the sales and distribution network, manufacturing and equipment and inventories of Mighty Corp., while JT International SA, an affiliate of Japan Tobacco, will own the trademarks and associated intellectual property of Mighty Corp. and Wong Chu King Holdings Inc.
Japan Tobacco is a company engaged in the business of importation, manufacturing, distribution and marketing on wholesale basis of tobacco products, while JTI SA is a global company engaged in the manufacture and sale of tobacco products.
Japan Tobacco Inc. earlier said it would buy Mighty Corp., the Philippines’ No. 2 cigarette maker, for about $936 million.
The Finance Department said it expected to receive about P30 billion from the deal, representing the tax liability of Mighty Corp.
Meanwhile, the PCC said that Rockwell and Mitsui Fudosan would engage in the development, construction and sale of real estate projects in the Philippines through the joint venture company, Rockwell MFA Corp.
Rockwell and Mitsui Fudosan shall purchase and subscribe to shares in RMFA, where 80 percent of the total outstanding shares of RMFA will be held by Rockwell and 20 percent of the total outstanding shares of Rockwell MFA will be held by MFA indirectly through the wholly-owned Philippine subsidiary, which is in the process of incorporation with the Securities and Exchange Commission.
The PCC, the country’s anti-trust body, is mandated to review mergers and acquisitions to ensure that the deals will not prejudice the interest of the consumers.